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World Journal of Research and Review (WJRR)

ISSN:2455-3956, Volume-6, Issue-4, April 2018 Pages 27-41

27 www.wjrr.org

Abstract- This study presents an empirical investigation of the

effect of Human Resource Management Practices on Employee

Retention and Performance in Nigerian Insurance Industry.

This study was motivated by the need to solve the problem of

high employee turnover in Nigerian Insurance

Industry.Employee turnover is an enemy of productivity and

increases cost of running a business. Human Resources (HR)

are the most valuable asset of any organization that is why

incessant increase in turnover of skillful human resource in an

organization will create a gap that will take time to fill at extra

cost. This study was guided by two key objectives, from which

appropriate research questions and hypotheses were

formulated. The specific objectives of this study were:(1)

determine the nature of relationship between Human Resource

Management Practices and employee retention in Nigerian

Insurance Industry.(2) Ascertain the extent of correlation

between Human Resource Management Practices and employee

performance in Nigerian Insurance Industry. A Sample size of

250 was determined from the population of 785 drawn from

Management and staff of selected firms from insurance

industry using Taro Yamene’s formula. The data collection was

by questionnaire structured in five point Likert scale. The study

concludes from the result as confirmed by the survey that there

was a weak and insignificant effect of HRM practices on

employee Retention in Nigerian Insurance Industry. However,

the study also confirmed that HRM practices have a positive

and significant effect on employee performance. This paper

strongly recommends that Government through NAICOM

should help to check the high handedness of some insurance

firms on their employees. Some of the insurance firms fail to

implement Nigerian labour laws and employee work benefits.

Index Terms - Employee Retention, Employee performance,

Employee Training, Performance Appraisal, Human Resource

Dr. Ernest Jebolise Chukwuka Ph.D., MNIM, CIIN, Department of

Business Administration,Michael and Cecilia Ibru University,

Agbarha-Otor, Delta state.

Nkiru Peace Nwakoby Ph.D., Entrepreneurial Studies

Unit,NnamdiAzikiwe University.Nigeria

Management Practices, Nigerian Insurance Industry,

Motivation.

I. INTRODUCTION

Human resource management considers people‟s dimension

in management since every organization constitute people,

acquiring their services, fine-tuning their skills, motivating

them to higher levels of performance and ensuring that they

continue to maintain their commitment to the organization

are prerequisites to achieving organizational objectives

(Chukwuka 2016). Human resource management (HRM)

also refers to the design of formal systems in an organization

to ensure the effective and efficient use of human talents to

accomplish the organizational goals without sacrificing the

needs of the organizational human element, (Mathis and

Jackson 2007). An efficient and effective management of

human resource in an organization solve the problem of

employee turnover.Employee turnover is an enemy of

productivity and increases cost of running a business. Human

Resources (HR) are the most valuable asset of any

organization that is why incessant increase in turnover of

skillful human resource in an organization will create a gap

that will take time to fill at extra cost. Everywhere around the

world, the sole reason of an organization being in business is

primarily to achieve its pre-determined objectives. This

pre-determined objective can only be achieved when the

organizational resources like personnel, machinery, raw

materials, capital et cetera are well mobilized and managed.

The efficient and effective utilization of these resources,

make the difference between well managed and poorly

managed organizations Chukwuka (2016). However, it is a

proven fact that human resources undoubtedly control the life

and the destiny of any business. This is because no, matter

how good an organizational policy, programs, goals, views

and objectives are; they will eventually be executed by

Effect of Human Resource Management Practices

on Employee Retention and Performance in

Nigerian Insurance Industry

Dr. Ernest Jebolise Chukwuka, Nkiru Peace Nwakoby

Effect of Human Resource Management Practices on Employee Retention and Performance in Nigerian Insurance

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human beings. To remain in this contemporary world of

workplace competition, every organization must be

performance and objective driven hence, the need for human

resources management (Minner 1982:18). Human resources

management is very crucial for effective performance and

appraisal which will guarantee enhanced and sustainable

employee performance for the achievement of the

organizational objectives. Human resource management has

evolved through so many stages in history.

A. OBJETCIVES OF THE STUDY

The main Thrust of this study is to ascertain the effect of

human resource management (HRM) practices on employee

Retention and performance in Nigerian Insurance Industry.

To this end, the study shall attempt to:

1. To determine the nature of relationship between

Human Resource Management Practices and

employee retention in Nigerian Insurance

Industry.

2. To ascertain the extent of correlation between

Human Resource Management Practices and

employee performance in Nigerian Insurance

Industry.

.

B. RESEARCH QUESTIONS

In the course of this research, the following questions would

be answered:

1. What is the nature of relationship between Human

Resource Management Practices and employee

retentionof Nigerian Insurance industry?

2. What is the extent of correlation between Human

Resource Management Practices and employee

performance in Nigerian Insurance industry?

Hypothesis one

H1: Human Resource Management Practices in Nigerian

Insurance industry have positive relationship with

employee retention.

Hypothesis Two

H1: Human Resource Management Practices are positively

correlated to employee performance in

Nigerian Insurance Industry.

II. REVIEW OF LITERATURE

A. Conceptual Review of Human Resource

Management Practices, Employee Retention and

Performance

Chukwuka (2016) posits that Human resource management

considers people dimension in management since every

organization constitute people, acquiring their services,

fine-tuning their skills, motivating them to higher levels of

performance and ensuring that they continue to maintain

their commitment to the organization are prerequisites to

achieving organizational objectives. Employee retention is

keeping the capable well-performing employees in the

organization for a longer period to achieve competitive

advantage (Peters & Sheridan, 1988). Allen (2008) defines

employee retention as the ability of an organization to retain

its key employees.

Employee retention can be represented by a simple statistic

(for example, a retention rate of 90% usually indicates that an

organization kept 90% of its employees in a given period).

However, many scholars consider employee retention as

relating to the efforts by which employers attempt to retain

employees in their workforce. In this sense, retention

becomes the strategies rather than the outcome (Allen 2008).

However, employee retention is multi-dimensional factor of

an organization‟s human resource policies which begins with

recruiting the right people in the organization and to stick

them with the organization‟s business portfolio (Freyer, 2014

cited in Madiha et al., 2009 cited in Fatima, 2011 cited in

Azeez 2017). Kerr and Slocum (1987) and Kopelman and

colleagues (1990) cited in Sheridan (1993) argue that the

variation in employee retention across organizations may be

related to Organizational culture values. These authors

suggested that an organization‟s cultural values influences its

human resource strategies, including selection and placement

policies, promotion and development procedures, and reward

systems. Different strategies result in psychological climates

that foster varying levels of commitment and retention

among employees working in different organization.

A distinction should be drawn between low-performing

employees and top performers, and efforts to retain



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employees should be targeted at valuable, contributing

employees.

Frank et al., (2004) cited in Azeez (2017) believe that

employee retention is the exertion by a business to keep

attractive labourers with a specific end goal to meet business

targets.

Employee turnover is a symptom of deeper issues that have

not been resolved, which may include low employee morale,

absence of a clear career path, lack of recognition, poor

employee-manager relationships or many other issues. A lack

of satisfaction and commitment to the organization can also

cause an employee to withdraw and begin looking for other

opportunities. Pay does not always play as large role in

inducing turnover as is typically believed (Allen 2008). In a

business setting, the objective of employers is usually to

decrease employee turnover, thereby decreasing training

costs, recruitment costs and loss

of talent and organizational knowledge. By implementing

lessons learned from key organizational behaviour concepts,

employers can improve retention rates and decrease the

associated costs of high turnover. However, this isn't always

the case. Employers can seek "positive turnover" whereby

they aim to maintain only those employees whom they

consider to be high performers. Employee turnover is one of

the major causes of unproductivity. Any organization that

have high turnover of her skillful employees will be

unproductive and suffer losses. Every business manager

should be concern about how to retain his skillful employee

for sustained organizational productivity. (Abelson

&Baysinger, 1984; Boudreau & Berger, 1985) cited in

Sheridan (1992) suggested that an effective human resource

management strategy should balance the cost of replacing the

employees who leave against the cost of retaining those who

stay since it is generally more expensive to replace highly

productive employees than to replace weak performers

(Cascio, 1982). A cost-effective human resource

management strategy will attempt to minimize turnover

among strong performers. However, since all employees will

eventually leave an organization, the strategy should induce

new employees who perform well to stay longer while

encouraging weaker performers to leave at earlier seniority

(Peters & Sheridan, 1988). Employee turnover can either be

voluntary or involuntary. Voluntary employee turnover

occurs when an employee decides to terminate his work

contract with his organization. This happens when an

employee chooses to leave the organization. When this

happens, the organization loses a valuable employee, his skill

and talent which must be replaced. Involuntary turnover

refers to a situation where the organization terminates the

employment contracts of the employee. This happens due to

many reasons such as decline in revenue of the organization,

retirement, resizing, restructuring, etc. In most cases, an

employee leaving either voluntary or involuntary is not due to

a negative relationship with the organization. However,

involuntary turnover is unavoidable, where it is a part of

business cost and life (Thomas 2009 cited in Azeez 2017).

The review of literature has shown that there is little

research evidence on how to solve the problem of employee

turnover as well as the workable strategies of employee

retention. The following, are employee retention research

findings that are backed up with empirical evidence.

McEvoy and Cascio‟s (1995) cited in Sheridan (1993) in

their study, adopted survey design as a methodology in

meta-analysis of 20 turnover studies indicated that some

human resource management practices, such as job

enrichment programs, have consistent but only moderate

effect (₵ =.17) on employee turnover rates across

organizations. Other practices, such as realistic job

previews, have very weak (₵=.o9) and inconsistent effects

on employee turnover rates. Terborg and Lee (1984) found

that the variation in annual turnover rates across

organizations was related to local labour market conditions

and the demographic characteristics of employees but that

organizational climate variables had very weak

relationships with employee turnover rates.

McEvoy and Cascio‟s (1987) meta-analysis of another 24

turnover studies indicated that an organization‟s stronger

performers tend to have lower turnover rates than weaker

performers during particular calendar periods (r = .28). They

found that the strength of the inverse relationship between

job performance and employee turnover varied significantly

with the length of the calendar period investigated and

labour market unemployment rates but reported no

moderating effects for organizational variables. Peter and

Sheridan (1988) and Barkman, Sheridan, and Peter (1992)


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using also the same methodology above indicated from their

findings that new employees job performance was

significantly related to their retention rates. The difference

in the retention rates of strong and weak performers varied

widely across organizations, but no human resource

management moderating variables were identified

B. The Practice and challenges of Human Resource

Management in Nigerian Insurance industry

One major problem bedeviling Nigerian Insurance Industry is

High employee turnover. The insurance firms operate a

conservative agency system that care less about employee

motivation and maintenance but solely emphasizes on

performance. The concept of Human resource management

(HRM) was introduced into the Nigerian literature in 1940

during the colonial era, with industrialization and

commercialization, which later became wage employment,

Fajana (2011) cited in Chukwuka (2016:8). Ever since then,

there has been a tremendous growth of HRM in Nigeria,

which in recent years has been characterized by lack of

professionalism and specialization. Different reasons have

been accounted for, as the challenges facing HRM practices

in Nigeria. Some of which are discussed here. The

socio-cultural diversity of Nigeria has influenced the HRM

practices in Nigeria. Nigeria is characterized by over

reliance on culture, language, religion, gender and

educational qualification as basis for an average Nigerian

to get employed is a factor of the aforementioned

variables.

Nigeria is one of the African countries faced by abundant

labour and scare talent. Attracting, developing, deploying

and retaining best talent had become a challenge, Fajana

(2009). That is why Fajana and lge (2007) argue that the

desire for top performance has driven the need for effective

management. HRM in Nigeria can be said to be still in

infancy and lot of academic research is still required in this

area. Lack of indigenous and comprehensive HRM models

is one of the challenges facing HRM practices in Nigeria,

which is why the majority of principles and practices

evidence in workplaces in Nigeria are all adopted from other

countries. HRM practices in Nigerian are a convergence

with western-inspired approaches, with the evidences of

cultural and institutional influences on it. That is, there is a

blend of transplanted and indigenous HRM practices. The

sensitivity to individual socialization as well as economic,

historical, political, and social contexts according to

Azolukwam and Perkins (2009) may enable organizations to

capitalize on the potential to transplant forms of HRM from

parent country cultures to developing countries such as

Nigeria. Nevertheless, most organization is characterized by

lack of funding for human resources management research

and development. Nigeria‟s democracy has enhanced the

practices of HRM in determining the quota of expatriates

she permits. Nigeria‟s economy allows the importation of

new technologies to enhance HRM, but training is still a bit

slow, thus employment of expatriates to handle such is still

encouraged. In Nigeria, there is application of new

management techniques and skills used in the running of the

organization, all aimed at running a cost effective system.

HRM practices in Nigeria cannot be totally diffused from

what is evidence in other countries. However, due to the

peculiarity of the social-cultural characteristic of Nigeria,

HRM in Nigeria is an area open for further research. Good

employer-employee relations are therefore critical to the

stable and sustainable development of the Nigerian

economy, as well as the world economy as a whole. Several

other factors have affected HRM practices in Nigeria

namely; lack of the internal manpower to complete all

necessary tasks. Secondly, the complexity of today‟s

business climate as a result of deregulation, globalization,

and technology advancements has outpaced many

companies level for companies to get special projects done

without adding employees to the payroll, Olofin and

Folawewo (2006). Most organizations in Nigeria now offer

a continued education and training to help its people

cultivate the right skills and expand their career within a

truly global and collaborative workplace. However, in

recent time, Nigerian workplaces are introducing different

HR ideologies adopted from foreign organizations. For

instance, there has been a tremendous increase in level of

contract or temporary employment and most of these

activities are contracted out to consultants, via outsourcing

thereby reducing the number of personnel in its payroll. The

implication of this is that organizations are paying lesser for



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more work, and at the same time, are losing the

psychological attachment, commitment, loyalty of their

employees. In Nigeria, organizational control is firmly in

the hands of management and the management roles is to

effectively manage the number of employees and match

them closely with desired goals and objectives. Both the

management and the Nigerian government strive to make

coherent HR policies that fit closely with overall business

strategy. For example, in the oil industry (which is the most

organized and highly paid employment sector) the

government of Nigeria has made concerted efforts over the

last 50 years to promote the participation of indigenous

workers in the oil industry.

Regulation 26 of the 1969 petroleum and Drilling Act

represent one of government‟s early efforts to increase

Nigerian national oil workers participation in the industry.

Recruitment is selectively done in Nigeria, and employees

are trained to perform required skills. However, due to the

complexities involved in the activities of the oil industries, a

lot of skilled expatriate services are required leading to a

high level of expatriate employment till date. This is also

because most of the oil companies are multinationals, with

parent companies in well developed and advanced

countries. For most organizations in Nigeria, performance

appraisal is a dialogue process and serves as a mentoring

process to generally mould the individual to Perform at an

optimal level. The employees are allowed to carry out a self

evaluation based on engagement and projects they were

involved in during the assessment period. It is expected that

performance appraisal system should be a fair process

involving assessments on skills technical knowledge and

how well the employee can offer quality service delivery.

However, the lack of skill and know how of the appraiser

have made some of the tools and parameter for appraising

employee performance appraiser system have pushed

indigenous companies in Nigeria to employ expatriate

services as trainers, in position requiring special skills and

expertise, with which Nigerian workers cannot compete.

These supervisors assess the performance and recommend

for promotion as the case may be.

C. EMPLOYEE PERFORMANCE MEASURES

This is often measured by the employee or supervisory rating,

but is often subjective and sometimes biased McFarland

(1979).

There are also several primary evaluation criteria which

include the following most frequently cited ones:Flexibility,

Adaptability, Absence of organizational strain, Successful

acquisition of scarce and valued resources, Survival, Control

over environment, Sense of identity, Capacity to test reality,

Optimal balance of integration and differentiation, Open

communication, Psychological commitment, Growth,

Employee acquisition and retention, Stability, Creativity

Societal value, Interpersonal relations, Interdepartmental

relations, Cohesion, efficiency and support, Conformity and

institutionalization, Simultaneous achievement of high

production-centered and high people-centered enterprise,

Manpower utilization, Development.

III. THEORETICAL MODEL REVIEW

A. Expectancy Theory of Motivation

This theory was developed by Vroom (1964), it has to do

with what motivates employee to performance. It can also be

related to what motivates an organization to attain efficiency

and effectiveness in their pursuit of organizational goals. An

expectancy approach postulate that‟s the level of motivation

of an employee depends on three basic beliefs: Expectancy

refers to the employee‟s perception of the likelihood or

possibility that their efforts will enable them to attain the

desirable performance goal instrumentality, on the other

hand, performance will be followed by a particular favorable

outcome. Valence refers to the value an outcome holds for the

employee contemplating it (Ezigbo 2011). The implications

of the expectancy theory to managers of organizations are

memories in the first instance, the increased expectancy is an

enablement for a work environment that facilitates good

performance, sets realistic attainable performance, and

provides training, support and encouragement to employees.

These give them confidence that they can perform at the

levels expected of extent be referred to a confidence building

theory. This is so because the motivation, which expectation

stirred in employees pursues them to action and injects in

them the confidence that their performances can enable them

to attain higher goals. Also think about the fact that people


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want to get out to work, what they will provide and what have

not presently obtained but could be obtained in the nearest

future encourage high performance. All these therefore,

make performance instrumental is positive outcome in an

organization (Ezigbo 2011).

B. Equity Theory by Stacy Adams

The rule of equity and farness has been introduced in

organizational management to ensure that employees rewards

are inconsonance with their groups or individual inputs,

hence the theory of equity. Weihrich (2008) contends that an

important factor in motivation is whether individuals

perceive the reward structure as being fair or not. The equity

theory which addresses this issue refers to an individual‟s

subjective judgment about the fairness of the reward he or she

gets, relative to the inputs in comparison with the rewards of

others. The inputs being considered include such factors as

effort, experience as well as education. The essential aspect

of the equity theory, which McCormick (2006) has received a

great deal of credit for its formulation is as follows: Outcome

of a person Outcome by another person.This equation shows

that there should be a balance of the outcome/inputs

relationship for one person in comparison with that of the

other person. In the logic of the word, if people fell that they

are inequitably rewarded, they may be dissatisfied, and they

may reduce the quantity or quality of output, or they may

even leave the organization. Also, if people think that the

rewards are greater than what is equitable, they may work

harder. Finally, if people perceive the reward as equitable

they probably will continue at the same level of output

(Weihrich ;Cannice and Koontz, 2008: 331). The theory of

equity, therefore, emphasizes that reward should be in

consonance with individuals or groups inputs in

organizational production as that will enhance the

organizational performance. (a) Schumpeterian (1942) view

on ecopreneurship and environment.

Equity theory of Stacy Adams has been seen by scholars as a

good motivational tool for employee, which leads to

organizational performance. The rule of equity and farness

has been introduced in this study to help organizational

management to ensure that employee‟s rewards are

inconsonance with their groups or individual inputs.

Employee‟s perception of fairness in an organization is a

motivation to perform. This study use this theory since the

study is based on organizational performance.

IV. HUMAN RESOURCE

MANAGEMENT PRACTICES AND

EMPLOYEE PERFORMANCE

RELATIONSHIP

Guest (2002), demonstrates that the Impact of HRM on

performance depends upon response of workforce towards

HRM practices, so the impact will drift in direction of the

perception of employees by practicing. HRM Ghebregiorgis

and Karstan (2007), acknowledge that the perceptions of the

employees provide broader evaluation of HRM systems. He

also evaluated a positive picture of HRM practices including

recruitment and selection, training and development and

compensation. Qureshi et al (2007), conclude that HR

practices are positively correlated with employee‟s

performance.

Huselid (1995) argues that the impact of HRM on behavior of

the employees results in the effectiveness of the employees.

Patterson et al (1997), explain that HR practices in selection

and training effects the performance of the employee

provided appropriate skills. Verbeeten (2008), suggests that

quality and quantity performance is positively associated

with clear and measurable goals; incentives are also

positively related with the performance. Medlin & Green

(2009), state that goal setting, employee engagement and

high level of workplace optimism collectively improves the

performance of an individual of an organization. Lyons

(2006), explains that involvement of team member in

designing of training for team leader improves leader

knowledge, skills learning and performance.

A. RECRUITMENT AND SELECTION AND

EMPLOYEE’S PERFORMANCE RELATIONSHIP

Lynch and Smith (2010), Cunningham (1999), recruitment

and selection are the initial process to evaluate staff. This is

concerned with identification, attraction and selection of the

qualified person meeting the job requirements of the

organization. It is an important process to carry out otherwise

the outcomes inappropriate recruitment and selection is

extensive. Qureshi and Ramay (2006), observe that HR



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practices are positive relationship with employee‟s

performance whereas selection and training is more affecting

the performance rather than other practices.

Chand and Katou (2007), demonstrate that recruitment and

selection, part of HRM system is strongly correlated with the

profitability and suggests that management of the

organization must focus on these HRM practices (recruitment

and selection) resulting in an improved organizational profit.

Stewart and Carson (1997), suggest that recruitment practices

of the organization must be consistent and coherent with

Human Resource Management functions like human

resource development, pay, benefits and business strategy of

the organization. It is identified that in staffing process, job

analysis is a prerequisite for all HR planning, development

and utilization activities done by the organization as job

analysis plays a vital role in staffing because it clearly shows

the particular requirement of the job, position in the structure

of the organization and human requirements to perform that

job.

O‟Meara and Petzall (2009), discover that questionnaire

respondents confirmed that job analysis for the particular task

including competence knowledge and experience,

undertaken by the HR executives. It is important to consider

fit between successful candidate and the organization.

Selection criteria are used as basis on the questions asked by

selection panel and in interview.

Hsu and Leat (2000,) reveal that line managers was more

involved in the final selection decisions than was indicated

for the staffing process as a whole.

B. TRAINING AND EMPLOYEE’S PERFORMANCE

RELATIONSHIP

Tzafrir (2005), Employee Training is an important element in

producing the human capital. Investing in employee training

programs can make employees feel indebted to the company

thereby increasing his loyalty. Training is necessary for the

employees to perform. Specialized jobs requires specialized

skills and knowledge by which the job is much easier to

perform as it is in the benefit of the employee. Qureshi et al

(2007), conclude that training as an HR practice has a very

positive impact on the performance of the employees as there

is highly positive correlation is found in the study. Danvila

Del Valle et al (2009), posit that training provides employees

with the skills, abilities and knowledge required by the

position. This effect can be explained in a way that the

organization is interested in investing in training for the

employees and giving them confidence and intends to count

on them in future, they will make more effort and give their

best at their work in an effective way.

Fig 1.Impact of human Resource Management on

performance in Pakistani Telecom sector.

Source: Zubar A.M, Tahir M.Q, Muhammed R. (2012)

Impact of human Resource Management on performance

in Pakistani telecom sector. A Seminar presented at

MunhammedAliJinnahUniversityIslamabad.


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Fig 2. Human resource management process

Source: Telsan, M.A (2007) Industrial and Business

Management, New Delhi, RejendraRadvindra Printers

limited.

C. HUMAN RESOURCE PLANNING

This is a process that identifies current and future human

resource needs for an organization to achieve it goals. Human

resources planning should serve as a link between human

resources management and the overall strategic plan of an

organization.

Recruitment

This is the process of identifying and hiring the best-qualified

candidate (from within or outside of an organization) for a

job vacancy, in a most timely and cost effective manner. The

purpose of recruitment is to generate qualified candidates

from which the organization may choose the most

appropriate employees for job opening. It is also the process

of identifying the sources of prospective candidates and to

stimulate them to apply for jobs Ezigbo (2007:400).She also

added that recruitment is the generation of applications or

applicants for specific positions. She believed that

recruitment is the process of looking for prospective

employees and motivating them to apply for jobs in the

organization. Sources of recruitment were categorized into

internal source and External source, she concluded.

Selection

Selection is seen as the process by which the organization

chooses from among the applicants those whom they feel

would best meet the job requirement. The organization

evaluates the skills, education, experiences, etc for each

candidate, to find the people who would fit the particular job

specification.

4.10 EMPLOYEE PERFORMANCE MANAGEMENT

PROCESS:

Steps involved in Employee Performance

Management.

Nitschke (1995), posits that performance management is

the systematic process by which an agency involves its

employees, as individuals and members of a group, in

improving organizational effectiveness in the

accomplishment of agency mission and goal.

Fig. 3 Employee performance management steps

Monitoring

Monitoring employees in an organization involves

consistently measuring performances and providing ongoing

feedback to employees and work groups on their progress

toward reaching their goals. Regulatory requirements for

monitoring performance includes, conducting process

reviews with employees where their performance is

compared against their elements and standards, Heathfield

(2011). Continuous monitoring provides the opportunity to

check how well employees are meeting predetermined

standards and to make changes to unrealistic or problematic

standards, And by monitoring continually acceptable

performance can be identified at any time during the



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appraisal period and assistance provided to address such

performance rather than wait until the end of the period when

summary rating levels are assigned.

Developing

Developing in this instance refers to the increase in the

capacity to perform through training, giving assignments that

introduce new skills or higher levels of responsibility,

improving work processes or other methods. Providing

employees with training and developmental opportunities

encourages good performances strengthens job-related skills

and competencies and helps employees keep up with changes

in the workplace, such as the introduction of new technology.

Carrying out the process of performance management

provides an excellent opportunity to identify to development

needs. During planning and monitoring of work, deficiencies

in performance become evident and can be addressed. Areas

for improving good performance also standout and action can

be taken to help successful employees improve event further,

Nitschke (1995).

Rating

On a periodic basis, organizations must find it useful to

summarize employee performance. This can be helpful for

looking at and comparing performance over time or among

various employees. Organizations need to know who their

best performers are. Within the context of formal

performance appraisal requirements, rating means evaluating

employee or group performance against the elements and

standards in an employee‟s performance plan and assigning a

summary rating of record. The rating of record is assigned

according to procedures included in the organization

appraisal program. It is based on work performed during an

entire appraisal period. The rating of record is assigned

according to procedures included in the organization

appraisal program. It is based on work preformed during an

entire appraisal period. The rating of record has a bearing on

various other personnel actions such as granting within-grade

pay increases and determining additional retention service

credit in a reduction in force.

Its worthy of note that although, group performance may

have an impact on an employees summary rating. A rating of

record is assigned only at an individual not to a group.

Rewarding

Heathfield(2011:70) believes that rewarding refers to

recognizing employees, individually and as members of

groups, for their performance and acknowledging their

contributions to the agency‟s mission. A basic principle of

effective management is that all behavior is controlled by its

consequences. These consequences can and should be both

formal and informal and both positive and negative.Good

performance is recognized without waiting for nominations

for formal awards to be solicited. Recognition is an ongoing,

natural part of day to day experiences. A lot of the actions

that reward good performance like saying thank you - don‟t

require a specific regulatory authority. Nonetheless, awards

regulations provide a broad range of forms that more formal

rewards can take, such as cash, time off, and many

nonmonetary items. The regulations also cover a variety of

contributions that can be rewarded from suggestions to group

accomplishments.

However, today‟s employee performance improvement

recognizes the “Hygiene factor” fair pay, reasonable benefits,

clean and safe working conditions. These are very important

in improving employee‟s performance for the realization of

organizational objectives managing performance effectively;

In effective organization, managers and employees have been

practicing good performance management naturally all their

lives, executing each key component process well. Goals are

set and work is planned routinely. Progress toward those

goals is measured and employees get feedback. High

standards are set, but care is also taken to develop the skills

needed to reach them. Formal and informal rewards are used

to recognize the behavior and results that accomplish the

mission. All five components possess working together and

supporting each other achieves natural, effective

performance management.

D. THE NEW ROLES OF HUMAN RESOURCE

MANAGEMENT

Change Management Courses: Some industry

commentators call the Human Resources function the last

bastion of bureaucracy. Traditionally, the role of the Human

Resources professional in many organizations has been to

serve as the systematizing, policing arm of executive

management. Their role was more closely aligned with


Industry

36 www.wjrr.org

personnel and administration functions that were viewed by

the organizations as paperwork.

Heathfield (2011), believes that when you consider that the

HR function in many companies, comes out of the

administration or finance department because hiring

employees paying employees, and dealing with benefits were

the organizations first HR needs, this is not surprising. She

posited that in the new role of change management courses

the HR professional‟s severed executive agenda well, but was

frequently viewed as a road block by much of the rest of the

organization. Some need for this role remains- you would not

want every manager putting his own spin on a sexual

harassment policy, for example, nor can every manager

interpret and implement the employee handbook as she

chooses. Payroll and benefits need administration, even if

they are new electronically handled.

In this role, employee regarded HR as the enemy and going to

HR was the kiss of death for your ongoing relationship with

your own manager. Employees believed, and were often

correct, that the HR function was in place solely to serve

management. If the HR role in your organization is not

transforming itself to align with forward thinking practices,

executive leadership must ask HR leaders some though

questions. Today‟s organizations cannot afford to have a HR

department that fails to contribute to and even lead modern

thinking. The role of the HR manager, director, or executive

must parallel the needs of his or her changing organization.

Successful organizations are becoming more adaptive,

resilient, quick to change direction and customer-centered.

Within this environment, the HR professional, who is

considered necessary by managers and executives, is a

strategic partner, an employee sponsor or advocate and a

change mentor.

Strategic Partner Role

In today‟s organizations, to guarantee their viability and

ability to contribute, HR managers need to think of

themselves as strategic partners. In this responsibility, the HR

person contributes to the development of and the

accomplishment of the organization wide business plan and

objectives.

The HR business objectives are established to support the

attainment of the overall strategic business plan and

objectives. The tactical HR representatives are deeply

knowledgeable about the design of work systems in which

people succeed and contribute.

This strategic partnership impacts HR services such as the

design of work position; hiring reward, recognition and

strategic pay, performance development and appraisal

systems, career and succession planning; and employee

development. When HR professionals are aligned with the

business, the personnel components of the organization are

thought about as a strategic contributor to business success.

Employee Advocate Role

An employee sponsor or advocate, the HR manager plays an

integral role in organizational success via his knowledge

about and advocacy of people. This advocacy includes

expertise in how to create a work environment in which

people will choose to be motivated, contributing, and

happy.Fostering effective methods of goals setting,

communication and empowerment through responsibility,

builds employee ownership of the organization. The HR

professional helps establish the organizational culture and

climate in which people have the competency, concern and

commitment of serve customers well.

In this role, the HR manager as emphasized also by

Heathfield (2011), provides overall talent management

strategies, employee development opportunities, employee

assistance programs gain sharing and profit-sharing

strategies, organization development interventions, due

process approaches to employee complaints and problem

solving, and regularly scheduled communication

opportunities.

V. METHODOLOGY

This study adopted the descriptive survey design which

allows for the collection of original data from the

respondents, describes the present situation and problems in

their natural setting and permits a sample representing the

population to be drawn. This research design is considered

most suitable for the study because it was well suited to the

description and correlative nature of study, the questionnaire

and oral interview collected quantitative and qualitative data

of 265 employees of Three Insurance firms in Nigeria

(Management cadre, middle cadre and lower cadre) were



37 www.wjrr.org

randomly selected. Out of the 265 questionnaires distribute,

250 were returned valid and 5 questionnaires were discarded

for incomplete information. The data collected were useful in

measuring the variables and testing the specified hypotheses

of the study, most of the data generated from the

questionnaire survey were ordinal in nature (responses were

mainly ratings measured on the Likert scale).

A. Discussion and Result

A total of two hundred and sixty five questionnaires were

distributed to the randomly selected three Insurance firms in

Nigeria. A total of Two hundred and fiftywere returned

completed. Five copies were invalidated for incomplete

information.

ANALYSIS FROM THE QUESTIONNAIRE

Table 1: Descriptive statistics on the effect of Human Resource management practices on employee Retention and

Performance (N=250)

B. TEST OF HYPOTHESIS

In testing the hypothesis, we employed the Pearson product moment coefficient or correlation to test the strength of

association.

DECISION RULE:

Variables SD D UND A SA Mean Standard Variance

Respondents 1 2 0 3 4 Statistics Deviation

A1 250 10 80 10 100 50 1.80 287 1.98

A2 250 100 135 5 10 3.30 0.73 0.53

A3 250 100 50 10 80 10 1.36 2.48 1.23

A4 250 90 155 5 3.30 0 67 0.45

A5 250 100 140 8 2 3.30 0.78 0.61

B1 250 175 75 3.30 0.46 0.21

B2 250 175 75 3.30 0.46 0.21

B3 250 2 6 163 79 3.24 0.70 0.48

B4 250 150 100 3.40 0.49 0.24

B5 250 2 4 144 100 3.34 0.66 0.43


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38 www.wjrr.org

However, for our guide,Pearson product moment Coefficient, is the statistical tool and are stated below(Oyesiku, 1995) :

When r > 70 very strong relationship

0.50 ≤ r <.70 strong relationship

0.20 ≤ r <0.50 moderate relationship

0.10≤ r < 0.20 weak relationship

R =< 0.10 no or negative relationship

HYPOTHESIS ONE

H1: Human Resource Management Practices have a significant and positive relationship with employee Retention.

Table 2.

HRM

Practices

(X)

Employee

Retention

(y)

Xy X2

Y2

Strongly

disagree

10 100 1000 100 10,000

Disagree 80 50 4000 6,400 2500

Un-decided 10 10 100 100 100

Agree 100 80 8000 10,000 6400

Strongly

agree

50 10 500 2500 100

Total 250 250 13,600 19,100 19,100

DECISION: Since the result above (r = 0.17) shows a very weak relationship between Human Resource Management

Practices and employee retention in Nigerian Insurance Industry. Therefore according to our decision rule, we accept the null

hypothesis (Ho) and reject alternative hypothesis (H1)

Interpretation: From the above calculation, the relationship between Human Resource Management Practices and employee

retention is a very weak one at co-efficient of r=0.17 and thus HRM practices in Nigerian Insurance Industry has a very weak

effect on employee retention. This result has confirmed the field survey.



39 www.wjrr.org

HYPOTHESIS TWO H1: Human Resource Management Practices are positively

correlated with employee performance.

Table 3

HRM practices (X) Employee performance (y) Xy X2

Y2

Strangle

disagree

0 0 0 0 0

Disagree 0 2 0 0 4

Un-decided 0 4 0 0 16

Agree 175 144 25,200 30625 20736

Strongly agree 75 100 7500 5625 10,000

Total 250 250 32700 36250 30756

DECISION: Since the result (r = 0.97) shows a very strong

positive correlation between HRM Practices and employee

performance, therefore, according to our decision rule, we

accept the alternative hypothesis (H1) and reject the null

hypothesis (Ho).

INTERPRETATION

From the above calculation, the HRM Practices have positive

and significant correlation with employee performance at a

correlation co-efficient of 0.97. The result has confirmed the

association as revealed by the field survey.

Table 4.7, shows data from respondents A1 and A2

questionnaire responses were used. The rate of responses

posted in each of the questions gave further credence to our

conclusion as follows: HRM Practices have a very strong

positive relationship on employee retention in my

organization. 4% strongly disagree, 32% disagree, 4% were

undecided, 40% agreed and 20% strongly agreed.

The rate of Employee retention in my organization is high

and positively correlated with my organizations profitability.

Strongly agree 40%, Disagree 20% undecided 4%, Agree

32% and strongly agree 4%. These observations have

revealed the weak and insignificant effect of HRM practices

in Nigerian Insurance Industry.

The second objective which is: to ascertain the extent of

correlation between HRM Practice and employee

performance in Nigerian Insurance Industry.

To further test the validity, credibility and suitability of our

results, we used B1 and B5 responses in table 4.7. To confirm

the consistency of the response observed, the rate of

responses posted in each question gave further credence to

our conclusion as follows, B1: HRM Practices has a

significant and positive correlations with employee

performance in my organization, strongly disagree, disagree

and undecided had 0% while Agree 70%, strongly agree =

30% responses.

B5 Employee performance in my organization has improved

as a result of an effective and efficient HRM Practices.

Strongly disagree 0%, disagree 0.8%, undecided 1.6% Agree

57.6%, and strongly agree 40%

C. CONCLUSIONS AND CONTRIBUTION TO

KNOWLEDGE


Industry

40 www.wjrr.org

It is an established fact that this study highlighted and

revealed the nature of relationship or effect of human

resources management practices peculiar to Nigerian

Insurance industry with employee retention and performance.

This study has brought to the fore the nature of effects or

relationship between human resource management practices,

employee retention and performance as well as the responses

of employees to human resources management practices in

Nigerian insurance industry thereby contributing to the

existing body of knowledge. Most other literature reviewed is

suggestive with their findings but this paper is assertive based

on empirical evidence.HRM practices in Nigerian Insurance

Industry have a weak effect and insignificant relationship

with Employee Retention. However, the study also

concluded that HRM practices have a positive relationship

with Employee Performance.

In the course of reviewing the related literature of this study,

it was discovered that there was paucity of research on the

effect of human resource management practices on employee

retention and performance in Nigerian insurance industry.

This aforementioned fact underscores the relevance of this

paper. It‟s a very good attempt in extending the frontiers of

the existing body of knowledge and as such, a leading attempt

in Nigerian insurance industry. This is a gap in literature that

this study had filled.

VI. RECOMMENDATIONS

Based on the findings of this study the following

recommendations are marshaled out.

• For Employee Retention in Nigerian Insurance Industry to

improve to a level that will lead to increase employee

productivity, the conservative agency system need to be

reviewed and employees motivated and maintained. .

•Government through NAICOM should help to check the

high handedness of some insurance firms on their employees.

Some of the insurance firms fail to implement Nigerian

labour laws and employee work benefits

VII. SUGGESTED AREA FOR

FURTHER STUDIES

This study has only confined it self on five human resource

management practices peculiar to Nigerian insurance

Industry, which includes employee procurement, Employee

performance appraisal, Employee Training, Compensation

and Employee Motivation. The other human resources

management practices need to be studied.

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367-413 Wright P, Gardener T,

Dr. Ernest Jebolise CHUKWUKA

graduated top of his class from the

prestigious University of Nigeria

Nsukka with a Bachelor’s degree

in Management. He later got his

Master’s (M.Sc.) in Human

Resource Management degree

from the same University. His

dogged quest for academic

excellence made him to register for

a Ph.D. program. He bagged his

Ph.D. Strategic Management from

the same University in 2017. He is

a Strategic Management

consultant with expertise in

Human Resource Management,

Business Development and Strategy, Project Management, Risk

management and Sustainability Entrepreneurship. He has many

scientific research Publications in peer review international journals

and three bestselling books. He was a Branch/Agency manager of an

International Insurance Company, African Alliance Insurance PLC

Asaba, Nigeria. He is currently a Lecturer in the Department of

Business Administration, Michael and Cecilia Ibru University, Delta

State, Nigeria.

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